DENVER—State regulators plan a widespread review of real estate appraisals in southern Colorado, citing a high rate of home foreclosures in the Pueblo area.

Erin Toll, director of the Colorado Division of Real Estate, told The Pueblo Chieftain in Friday’s editions her agency would formally announce the review next week.

“We’re just going to be taking a much closer look at real estate activities in the southern part of the state because the mortgage fraud and the mortgage foreclosure rate is so high in Pueblo,” she said.

She said her agency “is going to have a much greater presence in Pueblo” but declined to comment further.

Toll did not immediately return a call to The Associated Press Friday.

Word of the review came after the Real Estate Division accused appraiser James Esters of Parker of overvaluing eight Pueblo properties.

Esters agreed to surrender his license and pay a $7,500 fine. If he applies for a new license, he would have to pay an additional $16,500 fine, the division said.

Esters referred questions to his attorney, who did not immediately return a call to the AP.

The division also said O’Gorman had appraised a conservation easement in Walsenburg but did not have the expertise to do so.

O’Gorman’s attorney, Dan Foster, said she denied the allegations.

Foster said the division was using her as a scapegoat and had suspended her license without a hearing. He said she has asked Denver District Court for an injunction blocking the suspension until a hearing can be held.

Home foreclosures have reached worrisome levels in Colorado. The state Housing Division reported in March that foreclosures have nearly doubled since 2003, to nearly 22,000 last year.

Lawmakers this year passed a package of bills to address the issue, including one that bars mortgage brokers from trying to influence appraisers to inflate home values. A high appraisal could lead buyers to borrow more than they should or can afford.

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